Treasury Auction Watch: Treasury Auction Result for 12/10/2009

Thursday, December 10, 2009

The U.S. Treasury Department auctioned the following Treasury securities today.

29-year 11-month bond (CUSIP 912810QD3, reopening): $13 billion
(original issue $16 billion in November 2009)

Primary Dealer: $6.87 billion
Indirect Bidder: $5.21 billion
Indirect Bidder Percentage: 40.1% (original issue 43.9%)
Bid to Cover Ratio: 2.45 (original issue 2.26)
Interest Rate: 4.375%
High Yield: 4.520% (allotted at high: 40.62%) (original issue high yield 4.469%)

In addition, SOMA* purchased $70 million 29-year 11-month bond.

Total for the week: $191 billion

Total for December 2009 so far: $222 billion

Additional purchase by SOMA* for December 2009 so far: $9.108 billion

*For details, scroll down to the bottom of the page.

Terminology
SOMA	System Open Market Account at the Federal Reserve New York Bank
Primary Dealer	A bank or securities broker-dealer that may trade directly with the Federal Reserve System. Primary Dealers are required to bid at Treasury auctions. Current list of Primary Dealers is available at New york Fed.
Indirect Bidder	Supposed to be the foreign investors, both foreign central banks and foreign private investors
Bid to Cover ratio	The number of bids received divided by the number of bids accepted. The higher the ratio, the higher the demand.
Reopening	The U.S. Treasury issues additional amounts of a previously issued security. The reopened security has the same maturity date and coupon interest rate as the original security, but with a different issue date and usually a different purchase price.
Cash Management Bill (CMB)	A short-term security sold by the U.S. Department of the Treasury. The maturity on a CMB can range from a few days to six months. The money raised through these issues is used by the Treasury to meet any temporary shortfalls. CMBs tend to pay higher yields than bills with fixed maturities, but their shorter maturities lead to lower overall interest expense.
Supplementary Financing Program (SFP)	A program initiated by the U.S. Treasury Department at the request of the Federal Reserve in September 17, 2008. The cash raised from the auction will be used in the various Federal Reserve initiatives to support the financial markets and manage its balance sheet.